Developing new productsA Gillette case study

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Page 3: Beating the competition and growing the business

In order to guide itself and ensure the entire company is aligned in its objectives, an organisation often develops a vision statement. A vision statement is intended to convey what the organisation 'is all about'. It is important to internal audiences i.e. Gillette's staff, so they all know in which direction to pull. It is also important to external audiences such as the retailers who buy from Gillette and sell the products to consumers.

Gillette's vision statement reads:

'To build total brand value by innovating to deliver consumers value and customer leadership faster, better and more completely than our competitors.'

The component words really do matter.

'Delivering value' to consumers is not necessarily about being the cheapest, but about earning a reputation for high quality products that represent good value for money. That's true of many industries, and particularly those in which consumers believe there is a direct relationship between price and quality.

'Customer leadership' involves discovering what customers most want and then finding ways to fulfil those wants. It also involves helping customers to obtain maximum value out of their purchases e.g. by providing supporting literature, sound advice and a good after sales service, including product guarantees.

'Faster, better and more completely' represent key targets. As suggested earlier, speed of response to changing market conditions can be vital to success. Aiming to be 'faster' recognises that being 'second to....' can lead to poor sales and low market share. Being 'first to ...' successfully can also generate intense product and brand loyalty from consumers. Leading the way with a firm focus on consumer needs.

Aiming to be 'better' recognises that there are no gains from being first with a big breakthrough if the innovative product performs poorly, fails to meet the claims made for it, earns bad professional reviews, disappoints initial purchasers, and is rapidly followed by a clearly superior product from a rival firm.

'More completely' recognises that a razor is just one component of the much broader market of 'personal appearance and wellbeing'. 'Looking good, feeling good' is a many-staged process of personal grooming, of which shaving is just one aspect. It is no accident that Gillette is heavily involved in the market for deodorants and antiperspirants.

The company recognised that rising incomes would lead consumers to spend more on a 'total package' that enhances personal appearance, personal hygiene and as such developed a strategy to expand its position within this expanding market.

The market for razors is not one uniform market but a market that contains different segments, the needs of which have to be met in carefully targeted, subtly different ways.

Gillette recognised that different segments of the market are seeking different product benefits. So, over the years, it has sought to develop several product categories ranging from popular disposable razors to elaborate shaving systems. In the UK an increasing number of men have switched from disposable razors to shaving systems which fuels the market demand for handle and replaceable blades.

Gillette's overall emphasis is on providing premium performance via the best value for money shaving experience, whether this is a system razor for the discerning customer seeking the best in shaving technology, or a high quality disposable product for people looking for a good quality shave with the convenience of a disposable.

Many businesses look to expand into related areas that offer opportunities for growth and also an element of protection through market diversity. Gillette has four core business areas.

Gillette is the market leader in the majority of these areas, and the company continues to invest in each of these core categories. Clearly, Gillette has grown not only by developing its core business but also by acquiring successful businesses with growth potential in markets related to its core activity.

It is important to internal audiences i.e. Gillette's staff, so they all know in which direction to pull. As suggested earlier, speed of response to changing market conditions can be vital to success.